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UAE tax to double tobacco, energy drink prices

Tobacco and energy drink prices are set to double in the United Arab Emirates , which is imposing steep excise taxes to help ease a budget shortfall caused by low oil prices .

Khaled al-Bustani , director general of the newly established UAE Federal Tax Authority, said on Wednesday that the 100-percent tax would be introduced from October 1 .

Prices of other types of soft drinks will increase by 50 percent, Bustani told a press conference .
He declined to say how much the UAE will raise from the tax.

The decision stems from agreements reached by the six -nation Gulf Cooperation Council to raise the prices of those products , then impose a long -awaited value-added tax ( VAT) from the start of next year.

The GCC states — Bahrain , Kuwait , Oman, Qatar , Saudi Arabia and the United Arab Emirates — have been hit hard by a slump in oil revenues , which make up the bulk of their national income .

Saudi Arabia, which is forecast to post a large budget deficit in 2017 for the fourth year in a row , has already started imposing the excise tax, besides levying heavy residency fees for expatriates’ dependents.

The kingdom , as well as UAE and Qatar, announced it would start collecting VAT of five percent at the beginning of next year on most products and services .

Other members have not given a specific date .
The GCC states , which pump around 17 million barrels per day of crude oil, have seen their revenues plummet since the collapse of oil prices in mid-2014.